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John Lanchester on the future of the newspaper industry

During 2009, it was difficult to find anybody inside the newspaper business who was not profoundly depressed about the future of the industry. All the trend lines were downwards. The migration of readers and advertisers towards digital media was already a long-standing headache for the industry. Then came the credit crunch, whose aftermath brought recession, further decline in sales, and a sharp downturn in advertising. The result was industry-wide gloom.

The historic strength of the newspaper business, from an economic point of view, is the fact that it offers two revenue streams, sales and advertising. Both of these have for years been under severe pressure. The story told by circulation figures is so obvious that it’s difficult to find anything interesting to point out about it. A recent OECD report, The Evolution of News and the Internet, makes the picture clear.[*] Between 2004 and 2009, the US newspaper industry lost 34 per cent of its readers; the UK industry lost 22 per cent. Since then, the speed of the downturn has increased. In the last 12 months alone, seven broadsheet titles in the UK have seen their sales decline by more than 10 per cent. In the US, in the first six months of this year, the Chicago Tribune lost 9.8 per cent of its remaining readers, and the Los Angeles Times 14.7 per cent. For anyone who follows the monthly circulation figures, it has been literally years since there was any good news for anyone – the only cheering note has been provided by occasional stunts and one-offs such as the Telegraph’s expenses coup, or (God help us) the recent royal wedding special issues. Apart from that, it’s red ink all the way.

The trends in newspaper advertising have, if anything, been even worse. When circulation goes down, ad revenue goes down too, because the ads are reaching fewer readers and are therefore worth less. Compound this effect with a general advertising recession and the numbers are horrible. In the US, advertising revenue declined for six quarters in a row through mid-2009: in fact, it not only declined, but did so at a rate which increased every quarter. Total advertising dollars fell by 19.9 per cent, on a year-to-year basis, in the quarter to March 2009. Even online advertising fell. And things continued to get worse. In the next quarter, advertising fell by another 28 per cent, year-to-year. In the quarter after that, it fell by another 27 per cent. In the quarter after that, by 23.7 per cent. That slowing-down of the rate of the decline, by industry standards, counts as good news. I’m using US figures because they are easier to get hold of than their British equivalents; the trends here are the same.

A large part of the decline in these figures is to do with classified advertising. This was for years the secret weapon of the newspaper business. Classifieds are not the most glamorous aspect of the newspaper trade (at least, not for papers other than the LRB). What they are, however, is fabulously lucrative. For decades, whole sections of the newspaper industry were kept afloat by the classifieds. In the metropolitan UK, its most visible manifestation were the lavish Monday and Wednesday editions of the Guardian, featuring media jobs and public sector jobs, respectively. Right-wing types would sometimes bleat that these ads were a form of public sector subsidy for the paper, missing the point that they were a very effective way for an employer to target prospective employees, since every interested party knew the place to look for any relevant job ads. In the US, the importance of advertising was even greater: a fact which remains true, to a startling extent, when you look at the data which show the balance between revenue earned via sales and advertising. In the UK, which is roughly in the middle of the OECD range, the balance is 50-50. (The global average is 57-43 in favour of advertising.) In the US, the balance is 87 per cent advertising, 13 per cent sales.

This skewed and unusual arrangement reflects the fact that in the US, the newspaper business is a local one, with a strong tendency towards de facto monopoly. Most of America’s cities have (or had) a dominant newspaper, and that paper had a monopoly of classified advertising. During the long years of the 20th century’s newspaper boom, that monopoly was the proverbial licence to print money. It was this gushing faucet of classified revenue which allowed the elaborate superstructure of American newspapers to develop. The well-staffed offices, the air of self-conscious seriousness shading into pomposity, the tendency to file what from a British point of view always seemed several hundred words too much – all these features of American papers were underpinned by the easy money of monopoly-based classified advertising. It is one reason lessons from the US are not instantly generalisable to the UK, where the newspaper market is national, and as competitive as any equivalent business anywhere in the world. It is also the reason US newspapers are for the most part more fundamentally serious than British ones. In Britain, the papers have never been able to forget for long their close proximity to the entertainment industry.

With the arrival of the internet, in the form of both specialist job-search sites and free advertising outlets such as Craigslist, the fountain of classified ad revenue simply stopped. It is this more than anything which underlies not just the desperate financial condition of the US industry, but also one of the most obvious symbols and symptoms of the decline, the sudden physical shrinking of American newspapers. The Washington Post was once a behemoth, so big it could be physically hard to get to grips with. Now it feels like a freesheet. The Sunday edition of the New York Times was famous for being so heavy that paperboys would lob it onto the porch and accidentally kill the family dog. Now, a stiff breeze would carry the entire thing away before you’re halfway through your vanilla latte.

Put these things together, and the reason for the gloom is right there in the figures. The global flagship of serious journalism, the New York Times, lost $74.5 million in the quarter to March 2009, and accepted an injection of $250 million in cash from the Mexican telecoms billionaire Carlos Slim; it emerged that the paper was carrying $1.3 billion in accumulated debt. And it is one of the healthier US newspaper companies: the Tribune group, which owns the Los Angeles Times and the Chicago Tribune, had already gone bankrupt. In the UK, Times Newspapers lost £87.7 million in the year to June 2009, having lost £50.2 million in the previous year. These figures are not, by industry standards, especially bad. It was mayhem out there.

In the last few months, however, the tone of the conversation in the business has changed. It’s now not so much ‘We’re doomed!’, more ‘Quick, what’s the plan?’ For one thing, advertising has recovered. This isn’t so much to do with classified ads: those are gone, for the simple and clear-cut reason that it is no longer rational to put those ads in newspapers rather than online. Other forms of advertising, however, have slightly recovered, and rates of decline have reversed. One of the panic-making things about 2009 was that online newspaper ads shrank; that was terrifying, because online ads, although less lucrative than their print counterparts, were supposed to be the future of the news business. In 2010, online advertising has recovered for most papers, in most cases by double-digit amounts. The journalism being produced by newspapers now has more readers than ever before; in some cases, many millions of readers more. They are reading it for free online, of course, but still: it’s hard to be depressed by the thought that your product has a huge new audience. The Guardian, for instance, increased its online readership by 62 per cent during the year to December 2009, with a lot of that growth abroad; it had 37 million readers in the course of the year, and more readers in the US than the Los Angeles Times. It also earned £25 million from digital advertising. In the case of the LRB, the internet has helped the print circulation climb to 55,000, and 7000 of those readers have joined in the last 12 months. For the LRB, the internet offers a new way of getting readers outside the traditional channels of direct mail. The trouble with direct mail is that it’s expensive, and its audience is confined to an existing ‘universe’ of potential customers from mailing lists. The internet expands that audience to anyone with access to a web browser; in addition, the paper’s content becomes its own form of advertising. Another factor may be the length of the LRB’s articles: if you’re reading this online, your eyes are probably bleeding by now. So online works as a form of marketing without cannibalising the print circulation too much. That’s what seems to be happening, anyway. Besides, in the UK, customers are still buying, on average, 15 million papers a day. That is not a small number. The whole business is not about to disappear overnight.

There have been some unexpected successes. The Evening Standard was bought by the former KGB agent Alexander Lebedev, and turned into a freesheet. This at the time seemed to me the craziest idea anyone in the business has ever had, turning a paying product into something that you just give away, and hoping that the increased (though free) circulation causes a sufficiently lucrative spike in advertising. It’s like jumping out of an airplane in the hope that you will land in a big enough pile of hay. But guess what? It worked. The Standard’s circulation is now at 700,000 copies, and it is – as you can tell just by looking at it from a distance – fuller of ads than ever. It seems bizarre to me that something I was willing to pay for is doing better now that it’s given away; also, despite the fact that the Standard is free I hardly ever read it because I don’t travel on the Tube at rush hour, so I rarely get to see a copy. But the rush hour thing is a central reason for the paper’s rebirth: as a Standard veteran explained to me, ‘there’s no mobile reception in the Tube – it’s as simple as that.’ For the first time in quite a while, it’s not all gloom.

Some of the optimism, or the decrease in pessimism, is to do with the idea that if the decline in circulation and revenues slows down, papers will have time to work out a way of monetising their often huge online readerships. Online advertising is replacing print advertising at too low a pace to allow things to carry on as they used to; but the growth of online and the print recovery will at least earn the industry some time, maybe only a year or two, of breathing space. One of the reasons the industry is so anxious is that there is something inherently maddening about a situation in which papers have more readers than ever before – not just a few more readers, but millions more – and at the same time are facing collapse. The solution might seem to lie in that beguiling word ‘monetise’. It is a great word, precisely because it is so ugly. That very ugliness helps it to seem practical and concrete. To say you intend to ‘monetise’ something is to sound as if you have a plan. But that’s misleading. The brief history of the internet is dominated by wishful thinking about turning internet traffic into revenue; companies that have managed to do it are vastly outnumbered by those who have learned the cruel new information era twist on ‘if you build it, they will come.’ The modern form of that now runs: ‘if you build it, they may well come, but only as long as it’s free.’ That is why, as Warren Buffett observed, the internet is probably a ‘net negative for capitalists’.

Google, for instance, is a marvel of the modern world, and the range of services it offers everybody with access to the internet is genuinely wonderful. I do my web surfing via Google, I do most of my online reading via the news and data feeds I subscribe to on Google, both my work and family calendars are on Google (and by the way, the collective Google calendar is the single greatest breakthrough there has ever been in the field of passive aggression: ‘Oh – I suppose I thought somebody might check the calendar?’), my email is routed via Google and therefore Google saved me when my unbacked-up computer crashed and I would otherwise have lost my entire email archive; I use Google maps on my phone to navigate when I’m out and about, as well as for walking-time estimates; I frequently watch videos, especially of sporting events I’ve missed, on Google’s YouTube, though not nearly as much as my children use it to watch cartoons; in short, I use Google’s amazing suite of services all day, every day. Out of that suite of services, precisely one makes money: targeted internet advertising. Everything else Google does is essentially given away as a loss leader. In some cases, the losses are very big. Analysts reckon YouTube cost $500 million last year. Just imagine how that deficit would be described if YouTube were owned by a print media company.

The internet is the most effective means of giving stuff away for free that humanity has ever devised. Actually making money from it is not just hard, it may be fundamentally opposed to the character and momentum of the net. And yet this is where the newspaper business now is. Its underlying problems are to do with the net: loss of circulation and ad revenue are both driven by the rise of new media. Its opportunities come from the net too: that huge new army of readers. The industry is no longer going off a cliff, but it is still on a downward slope, and unless something happens to stop it, costs per copy will continue to rise relative to sales, and eventually newspapers will either die or (more likely) be so hollowed out by cost-cutting that they exist as freesheets with a thin, non-functioning veneer of pretend journalism. In the words of the OECD report: ‘Those writing about the developments of the press emphasise that despite the length of the newspaper history, it is relatively recent that non-partisan, independent press coupled with investigative journalism are the order of the day.’ It hasn’t been here for ever, and it could well go away.

It’s worth taking a moment to wonder if that would matter. At the moment, to borrow the analysis Alan Rusbridger offered in a long blog post, the media landscape is divided into three main players. 1. The press. 2. The big public broadcasters. 3. The new media, which are lively, chaotic, decentralised, prone to fads and crazes, and are opening up access to public spaces in all sorts of new ways.[†]

Of these bodies, we don’t need to worry too much (not here, anyway) about 2. and 3. The BBC is squabbled with and snarled at by politicians, the public and other media players, but the likelihood is that it will be around in something resembling its current form for at least the medium term. The attack on the BBC by the Murdochs is so overtly self-interested, and shows so little concern with the general ecology of life in the UK, that it would in another context seem funny. One of the things it does is inadvertently highlight how little BSkyB spends on creating worthwhile content. The Beeb has £4.6 billion in revenue and generates a world of content, while BSkyB has £5.9 billion and generates naff all. So the BBC has an extensive list of flaws but is indispensable to public life in the UK. It’s a pity that it currently has the worst senior management it’s ever had. (It’s a particular pity that its director general is paid £800,000 a year. That’s a job which should be done by someone who is motivated by the wider social importance of the BBC; in other words, as DG we need someone who is willing to be paid below the market rate.) But this is what we are stuck with, and it seems to me that no political party will go further than denouncing the BBC and making cuts to its funding.

As for the new media, they are clearly a work in progress, and it would be premature to say what their impact will be on the fundamentals of public and political life. Their impact on private life is more apparent, and seems to focus on an increase in the number of ways for people to meet and connect, both online and off. In some ways, the story of text messaging is a parable for the way the net has evolved. SMS messaging was taken up by Nokia in Finland as a way of allowing engineers to communicate short, factual messages about where they were, what they were doing and how long it would take. Nokia then made the service available on their phones, since, well, there it was, so you might as well let the punters have a go. They were amazed to see the spike in data traffic which suddenly showed up. The reason: Finnish teenagers were using SMS to organise their social lives. From there, texting hasn’t looked back. Nobody decided what the purpose of SMS would be, it just evolved. It would be hard to deny that texting is a new thing; also hard to argue that it has fundamentally changed the world. I’d say that’s roughly where we are with the journalistic uses of the new media. Their democratising and decentralising effects have barely begun, and aren’t going to go away. In a sense, the WikiLeaks episode(s) shows both what the digital media can and can’t do. Its release of information is unprecedented: but it is not journalism. The data need to be interpreted, studied, made into a story. For that we need number 1, the press.

Would it matter if it died? Does it do things that 2. and 3. don’t do? In Britain, it is tempting to say that the papers’ many defects stack up to such an extent that they wouldn’t be missed. A complete submission to the idea that news is entertainment and entertainment is news; a pack mentality and the idea that only things which are being already covered in the media are worth covering; a general retreat from the principles of serious journalism, investigative journalism, and a horror of complicated ideas; amnesia; a default setting to knee-jerk populism: none of these things is a virtue. But the UK newspaper industry is an energetic and cacophonous thing, one which sees a big part of its role as being to make the government’s life as difficult as possible. Because of the way our constitution is skewed towards the incumbent government, for a lot of the time the press is a de facto form of opposition. New Labourites would routinely refer to the editor of the Daily Mail as ‘the most powerful man in the country’. That was an exaggeration, and it described something whose effects were almost entirely malign; and yet we would miss this countervailing force if it were gone. Governments are constantly accumulating more power: one of the most glaring trends in the last 30 years of political history is that all governments arrogate more power to themselves, even when (it’s tempting to say ‘especially when’) their ideology is overtly right-wing and explicitly anti-government. The press is just about the only force which resists that, and for that reason alone it is now a necessary component of modern democracy. Without it our democracy would head the way that papers themselves risk heading, and become hollowed out, with the external apparatus of democratic machinery but without the informed electorate which the press helps create. And one beauty of the current arrangement is that it functions without the press having to be well-meaning or high-minded.

The fact that newspapers are necessary, however, does not mean that they will survive. Route One – the route down which the press is currently travelling – involves a slow decline in revenue with the papers employing fewer and fewer journalists and containing less and less that is worth reading. Nothing is less likely than some form of bail-out for the industry. If a solution to this slow decline is going to be found, it will be in the form of a market mechanism. No one has found it yet. OECD again: ‘The study also finds that currently no business and/or revenue sharing models have been found to finance in-depth independent news production. This raises questions as to the supply of high-quality journalism in the longer term.’

The one exception to the OECD’s general rule lies in the area of financial journalism, in which both the Financial Times and the Wall Street Journal have been able to make money by putting a paywall around their content. The FT has a staggered system in which the first casual visits are completely free; then you have to register, but the articles are free to read; then when you’ve read more than a certain amount of content, you have to pay. When you ask insiders why this works, they always say the same thing: ‘Because people have a reason to read the FT.’ This immediately raises an obvious question: why don’t they have a reason to read the other papers? Wouldn’t it be a good idea for those papers to be the kind of thing that people have a reason to read, too? Maybe if the papers were less like the stuff you could get for free – celebrity gossip, opinions about knickers, and short news stories – people would have more reason to pay for them? But this is easy to say, and the fact is that the current mix does have lots of readers, more than ever before; it’s just that it’s difficult to work out how to get them to pay without taking a terrifying leap into the abyss. The attempts to get online readers to pay have so far failed. Some papers have tried the model of putting paywalls around bits of their content: the New York Times did that with its op-ed material, but then took the wall down. The apparent reason was that the drop in traffic caused by the paywall was so great that it ended up costing money, because the paper’s internet ads reached so many fewer readers. The new revenue was nowhere near enough to compensate from the ad drop-off. That’s one way of getting it wrong. Some of the other ways of getting it wrong are more straightforward. Newsday on Long Island (which when last I saw it was a pretty good paper) went behind a paywall in October 2009. At that point it was having 2.2 million unique visitors a month. Guess how many people had signed up to pay by January 2010? Thirty-five. A way ahead for the industry, this is not.

The man who is trying harder than anyone else to solve this conundrum is Rupert Murdoch. It is hilarious that Murdoch, who has in many respects been a pantomime villain for progressives, should now be riding to the rescue of the print media – but it shows that the Dirty Digger, for all his flaws, does genuinely love the newspaper business. (It also shows that he owns many hugely valuable franchises in print journalism, but there’s no law saying you aren’t allowed to have overlapping motives.) His dislike of giving his expensively developed content away for free is well known. He owns the Wall Street Journal, which successfully charges for access. His solution: to erect a paywall around the Times and Sunday Times and begin charging for content.

I don’t think I can be alone in having had very mixed feelings about this experiment. On the one hand, I think Murdoch has been a strongly negative force in British life and I don’t wish his enterprises well. On the other, if it did turn out that people were willing to switch from reading stuff for free to paying for it – were willing to hop over the paywall as if they barely noticed it was there – then that would, right in that moment, be the saving of the entire newspaper industry in its current form. If the Times paywall worked, we could all exhale and slap each other on the back and say ‘that was a close one’ and forget that the business had once seemed doomed. But I should say that I don’t know a single internet-minded person who thought that the paywall experiment had any chance of succeeding.

It hasn’t. The first set of figures giving the news on ‘the most important business story in Britain this year’, as several observers called it, said that the Times site had 105,000 paid subscribers. The data lumped together temporary low-cost subscriptions, iPad subscriptions, day-pass subscribers and proper monthly subscriptions to arrive at its headline six-figure count. It did not break down the data into categories and the general view was that if the Times had had to chuck in Uncle Tom Cobley to get the numbers up over 100,000 it would have done so. Traffic to the website in total is hugely down. The Times is saying it’s down by about 90 per cent, but other sources have cited it as being down by 98 per cent. These numbers are not just bad, they’re terrible. The industry rumour is that only about half the people paying for content are actual subscribers. There are, apparently, just 54,000 people shelling out their monthly £8.67, generating total revenue of £5.6 million a year. That is nowhere near enough. I would imagine that the loss in revenue from online advertising, a direct result of the precipitate crash in web traffic, would more than wipe out the revenue from the paywall. In fact I’d be amazed if that weren’t the case. Nobody is going to follow Murdoch down this route.

It doesn’t help that the paywall is so badly implemented. Is there no computer literate person in a position of power at Times Newspapers? If there is, it doesn’t show. I registered with the site to see how it’s working. The short answer: it isn’t, not by internet standards. I have to reregister every single time I want to read the paper. On the net, people can just about stir their stumps to fill out a registration form, if they really really really want what’s on the other side of it. But we will do it once and once only. Making people register every time they want to look at Times content? Daft. For an experiment of such consequence to be executed so badly just shows how big the gap is between the people who own the paper and the digital audience they are trying to reach.

So, now what? Is that it, Game Over for print media? I don’t think so, not quite yet. Just as one of the industry’s biggest strengths, classified advertising, turned out to be a hidden weakness when that business simply upped and left, now there is a similar paradox, but the other way around: one of its greatest weaknesses may turn out to be a potential saviour. That weakness is simple: it is the cost of physically producing a newspaper. The production and distribution of newspapers is fantastically, outlandishly expensive. Everything about it, from the paper to the newsprint to the presses to the maintenance to the distribution infrastructure, costs a bomb. In OECD-speak: ‘On the cost side, costs unrelated to editorial work such as production, maintenance, administration, promotion and advertising and distribution dominate newspaper costs. These large fixed costs make newspaper organisations more vulnerable to the downturns and less agile in reacting to the online news environment.’

Why is that a good thing? Because the internet can make all those costs go away. If newspapers switched over to being all online, the cost base would be instantly and permanently transformed. The OECD report puts the cost of printing a typical paper at 28 per cent and the cost of sales and distribution at 24 per cent: so the physical being of the paper absorbs 52 per cent of all costs. (Administration costs another 8 per cent and advertising another 16.) That figure may well be conservative. A persuasive looking analysis in the Business Insider put the cost of printing and distributing the New York Times at $644 million, and then added this: ‘a source with knowledge of the real numbers tells us we’re so low in our estimate of the Times’s printing costs that we’re not even in the ballpark.’ Taking the lower figure, that means that New York Times, if it stopped printing a physical edition of the paper, could afford to give every subscriber a free Kindle. Not the bog-standard Kindle, but the one with free global data access. And not just one Kindle, but four Kindles. And not just once, but every year. And that’s using the low estimate for the costs of printing.

At some point, the economic logic of this is going to become irresistible. To my certain knowledge, some newspapers have been discussing moves along these lines. In the meantime, one crazy visionary is already giving it a go, by developing an iPad-only daily newspaper which employs more than a hundred journalists but (or maybe that should be ‘and’) has no print edition. The name of this fantasist, this dreamer, this desperado? Step forward again, Rupert Murdoch. His new online-only paper is going to be called the Daily. (There’s a rumour that they wanted to call it the Daily Planet, the paper that Superman worked for, but DC Comics said no.) The project is a joint venture with Apple, and is going to cost 99 cents a week. That is a very tempting price indeed, and when you compare it with the cost of a single day’s access to the Times – £1 – it makes the point about what you can do with the economics of the business once you stop printing papers.

So this, I think, is the future of newspapers. Their cost base will force them to junk their print editions. (I know some people would like a luxury product, only-for-nostalgics print version, but it’s not clear to me how the economics of that would be made to work.) But that’s not all there will be. Here, I need to quote myself back in 2002, reflecting on the state of the music business at a time when online file-sharing had just arrived and the industry hadn’t yet formulated a reply:

The solution to the industry’s woes is simple – not easy, but simple. When the cassette recorder was invented, the music industry announced a moral panic over the fact that people could simply steal music from the radio, or copy it from each other. Some people did, too, but not nearly as many as the people who simply bought the stuff. That’s because tapes were relatively cheap, and it was more of a shag to steal, copy or bootleg them than it was to buy them. It was the same with videos. The entertainment business needs to make it easier, and more convenient, to pay for this stuff than it is to steal it.

The thing which did that, when it came along, was iTunes, which has reshaped both the music business and the digital landscape more generally.

I feel equally certain in saying that what the print media need, more than anything else, is a new payment mechanism for online reading, which lets you read anything you like, wherever it is published, and then charges you on an aggregated basis, either monthly or yearly or whatever. For many people, this would be integrated into an RSS feed, to create what amounts to an individualised newspaper. I would be entirely happy to pay to subscribe to Anthony Lane on movies in the New Yorker, and Patricia Wells on restaurants in the Herald Tribune, and Larry Elliott on economics in the Guardian, and David Pogue on technology in the New York Times, and I also want to feel free to read anything else which catches my eye, whenever I feel like it – I just don’t want to have to think about paying every time I click on the article to read it. I want a monthly or yearly charge, taken off my credit card without my having to think about it. That charge could mount up pretty high over the course of a year, but not as high as the current costs – $4.99 for a single digital issue of the New Yorker, for example. Papers can charge different amounts for their content, and we the readers will be the market who decides what is worth what. The charging process has to be both invisible and transparent: invisible at the moment of use, and transparent when I want to see what I’ve paid. The idea is for a cross between a print version of Spotify, with a dash of Amazon and a dash of iTunes. All those players have the expertise to do it, as do the credit card companies. From the technical perspective it should not be all that hard to do, and it would, I believe, work in remonetising the newspaper business. Let us pay – we’re happy to pay.

Here again a weakness is a strength. Young people don’t read the papers. In the words of the OECD, ‘a significant proportion of young people are not reading conventional news at all, or irregularly. Research undertaken in the United Kingdom also shows that, although young people demonstrate an apparent ease and familiarity with computers, they rely heavily on search engines, view rather than read and sometimes do not possess the critical skills to assess the information they find on the web.’ Why is that a good thing? Because those young readers are precisely the ones who are allergic to paying for things over the internet. But if newspaper readers are older, they will be more willing to pay: this is something we know for a fact from the music industry, where older consumers prefer to pay for their music whereas younger ones prefer to steal it. That’s why Vera Lynn had a number one record last year.

I say again, let us pay. Make the process as easy as possible. Make it invisible and transparent. Make us register once and once only. Walls are not the way forward, but walls are not the same thing as payment, and without some form of payment, the press will not be here in five years’ time. I hope one of the big organisations is working on this idea or something like it, because for print newspapers, the clock isn’t just ticking, it’s ticking louder and faster.

Letters

John Lanchester isn’t quite correct in stating that the Financial Times and Wall Street Journal are the only exceptions to the general rule that paywalls cannot be made to work (LRB, 16 December 2010). The Racing Post offers an excellent example of a successful paywall, both for the punter (£8.95 per month, as opposed to £55.80 for the newspaper) and, obviously, for the publishers, who have been able to increase subscriptions by 13 per cent this year. But it does illustrate an important point. Paywalls will work if the newspaper is, first, very specialised, and second, contains information which is only of use on that day. One can read other newspapers several days in arrears, but every punter knows it’s not much use reading the form a day later.

John Harringay
London SE15

So, according to John Lanchester the attacks on the BBC by the Murdochs are ‘overtly self-interested’. Does that also invalidate them? And why does that highlight ‘how little BSkyB spends on creating worthwhile content’? Worth whose while? I am watching live Ashes cricket as I write, and will then move on to live India v. South Africa. Not on the BBC, which despite receiving £50 billion in licence fees over the years has never bothered to show a single ball of live overseas Test cricket, but on BSkyB. Very much worth my while, and many others’ – 55 per cent of UK households subscribe to Sky content.

Perhaps John Lanchester means ‘UK-originated content’? If we look at just the BBC’s licence fee income of £3.6 billion, rather than the total income of £4.6 billion cited by Lanchester, the BBC claims to have spent just over half (£1.86 billion) on its TV channels. However, Ofcom calculates that the BBC spent £1.23 billion on first-run TV origination in 2009, and £1.36 billion in total on network TV content – a decline of £200 million since 2005, despite a significant rise in revenue.

By comparison, Sky received about £3.3 billion in TV subscriptions. Out of that, it spent £1.9bn on content. Of course, a large chunk was for licensing third-party product (such as Hollywood movies), but the biggest part – nearly £1 billion – was for sport. The thousands of people who work on these programmes do not regard themselves as doing ‘naff all’, by comparison with the BBC’s steady diet of Homes under the Hammer, Bargain Hunt, Flog It! etc. Nor do the millions who watch the programmes they make.

BSkyB’s news and arts output certainly bears comparison with the BBC’s (and wins more industry awards), and if it competes only marginally in terms of drama, comedy and documentaries, allowance has to be made for a broadcaster trying to deliver something distinctive to customers who choose to pay, rather than imitate the formulaic programmes already available on terrestrial television. Meanwhile, BBC3 (which cost licence fee payers £115 million last year), this week broadcast 94 programmes, of which 89 were repeats.

It would help if David Elstein (Letters, 20 January) compared like with like when singing the praises of BSkyB and damning the BBC. Sky invests in sport because it’s a commercial company and sport is massively profitable. The BBC invests across the whole range of TV, radio and online content because it’s a public service broadcaster charged with a set of public service obligations. The BBC and Sky exist for different purposes, have different funding models, different legal status, different relationships to national politics and culture.